Labour's final admission of defeat.

I’ve just seen the Labour Party finally admit defeat afer all these years. Caroline Flint (Shadow Energy Secretary), appearing on the AM show, said that when elected, Labour will break up the big six companies into more smaller companies to encourage competition in a free market to keep prices low.

It’s no wonder the Onions are furious – “Thatcherite” Economics triumphs, it seems, and “Red Ed” Millibanana turns out to be a bit of spin deployed to get their votes in the leadership election…

Which big 6? Energy?

Caroline Flint (Shadow Energy Secretary)

You think I read your posts fully? 😀

They should just seize the supplies of gas and electricity back from them all and re-nationalise it.

Competition and free markets haven’t worked for the consumer. They certainly have for the shareholders and fat cat executives.

So large private concerns in a “free market” don’t bother to compete with each other and don’t work in the public interest?

You ever tried to deal with a nationalised company on the continent? For example, getting a phone line connected and broadband set up? Here it takes 10 days, and you can pick and choose – there it takes three months and it ain’t cheap.

The system more or less works as is – let’s not break it. The energy companies actually make about 5p in the pound in profit, I don’t think that’s unreasonable and certainly nothing like mobile phone companies.

If anything needs taking out back and shooting, it’s OFCOM. Look at Everything Everywhere, a monopolistic force if ever I’ve seen one.

So large private concerns in a “free market” don’t bother to compete with each other and don’t work in the public interest?

IIRC its why when we nationalised them all we had to have a regulatory authority to erm regulate them – its like they explicitly knew they could not be trusted to do anything other than maximise their own profits rather than serve consumers [ yes sometimes these are the same thing but not always].

You ever tried to deal with a nationalised company on the continent?

I have not perhaps you could tell us which continental countries ONLY have a nationalised telecoms industry and where you had your problems?

Have you seen how much profit an energy company makes per household? I’m sure I once read that if energy was supplied at cost to the provider (including its overheads), straight to you, you’d probably save £60ish a year.

Can anyone confirm that?

Edit. Don’t know how reliable this is. http://www.energylinx.co.uk/news/2012/07/is-british-gas-making-too-much-profit.html

Competition and free markets haven’t worked for the consumer. They certainly have for the shareholders

and those “shareholders”…. are your and my pension fund. (particularly true for energy companies etc. with high yield.)

When did we all get pension funds ?

Have you seen how much profit an energy company makes per household? I’m sure I once read that if energy was supplied at cost to the provider (including its overheads), straight to you, you’d probably save £60ish a year.

Thats the con of the way the market has been set up, claiming only to make a small profit from consumer sales, while making huge profits selling into the wholesale market.

At least a mugger looks you in the eye when robbing you, these ‘billing’ companies are parasitic.

The labour party seems to be moving ever rightwards– the ‘leadership’ anyhow, while the rank and file are told not to ‘rock ‘ the boat in case the Daily Mail makes an issue of it!

I think that the Labour party , has so lost its way. they can’t even read a compass.

Shame she’d not read her history, as all that will happen is that they re-create the current situation – and in a way, its exactly the same thought that Mrs T’s transport minister thought in the 80’s when he privatised the buses… He somehow expected the country to be covered in one-man band bus companies.

Because neither of them actually understand either how business works, or how costs can be reduced by been bigger. 😳

Is government intervention into private markets very Thatcherite?

IIRC its why when we nationalised them all we had to have a regulatory authority to erm regulate them

Only the natural monopolies tho? Not the ferries, not the car manufacturers, not the removals companies…?

Rudebwoy +1

The one party state is becoming more and more visible.
The sham of our democracy is boiling down to choosing which colour tie our leaders wear once every four years.
If the monopolies and mergers commission had a single ball between them they’d be investigating the ConLab cartel.

Meanwhile Labour in Scotland is abandoning the principle of universal benefits – they’re really Tory-lite now, without the charisma.

Flaperon – Member

You ever tried to deal with a nationalised company on the continent?

No, but I dealt with plenty in this country before the tory fiends privatised the utilities, and it was much better. Less fractured, more local knowledge and less deceipt.

druidh – Member
You do know that the Labour and Tory parties are simply operating a good cop/bad cop scam on you, don’t you? The Tories are obviously the “baddies” in this instance. They implement all the nasty policies while the Labour party stand on the sidelines whinging. After a while, they “pop out for a coffee” and in come Labour, talking all friendly and pally but not actually undoing anything the Tories did. They are both complicit in this – it’s to give the electorate the impression that they actually have a say in how the country is run via the ballot box and both parties need each other to survive.

As I was saying…..

Bottom of the chart – The percentage of household expenditure spent on fuel roughly halved after privatisation!

statistics eh?

uk average salries more than doubled between 1980 and 1990 alone !

1980 7,585.53
1981 8,566.07
1982 9,369.56
1983 10,159.44
1984 10,779.08
1985 11,691.52
1986 12,615.15
1987 13,597.24
1988 14,778.08
1989 16,122.89
1990 17,689.37
1991 19,045.83
1992 20,208.51
1993 20,817.53
1994 21,592.65
1995 22,257.04
1996 23,059.85
1997 24,028.75
1998 25,274.48
1999 26,492.52
2000 27,682.89
2001 28,900.94
2002 29,952.88
2003 30,977.15
2004 32,333.61
2005 33,634.71
2006 35,018.85
2007 36,347.63
2008 37,704.10
2009 37,580.11

http://uk.answers.yahoo.com/question/index?qid=20100315071014AA4sFWm

I also suspect the north sea coming online in the 80s was a massive factor in bringing the price down

Labour’s final admission of defeat.

“Thatcherite” Economics triumphs

If you think opposition to monopoly capitalism represents a defeat for Labour and a victory for Thatcherism, then you really need to brush up on your politics Woppit.

uk average salries more than doubled between 1980 and 1990 alone

In real terms?

You see, there’s this thing called inflation… thats why I pointed out that I was referring

The percentage of household expenditure

Because that gets round the inflation problem, of course, if you’re telling me that the average household was significantly better off in real terms between 1980 and 1990, then I think we’d all have to agree on a rallying call of Huzzah for Thatcherism in delivering this!

As for your point on North sea gas etc – you’ll see from the figures I published that the biggest drop was in Electricity prices… where domestic market privatisation only really kicked in in the nineties.

In other news… Ernie, I see that Hollande, your chosen saviour of European Keynsian economics and socialism has announced France’s harshest ever budget with 12 Billion of Austerity cuts. To be fair I notice he’s also announced a 75% tax on incomes over one million Euro… expected to raise less than 200 million, even if nobody pisses off abroad to avoid it… I suppose thats Socialist Mathematics for you, 75% of nothing is morally preferable to 45 % of a million 😉

I read this morning that Ed was on about breaking up the banks unless they reform themselves. So taking on the vested interests in the city in the interests of us… The consumer

Sounds great!

Trouble is…. I don’t believe a bloody word of it! It’s all just mood music. Telling people what they want to hear. Same as CMD did before the last election. All vague sort of half formed and half-baked ‘ideas’. Will any of it make it into actual policies? To be committed to in an actual manifesto? Not a bloody chance!!!

Labour, when in power, are even more craven to the city and big business than the Tories. Who have at least got the excuse that they all used to bugger each other in the same private school dormitories.

Zulu, I think your point may be correct [ prices dropped though we could debate why] but the stats you have used to show this dont show that cost have dropped. They show households spend a smaller percentage of their income which is not the same thing – energy efficient white goods is probably a bigger factor meaning folk use less. I assume you get the point as to why % of income spend does not necessarily tell us that the price has gone down we may just use less- hardly rocket science.

PS
I now only spend 5% of my income on petrol compared to 15% in 2000 the so therefore costs of petrol have fallen over the same period- the distanced I commuted is of course irrelevant in this isn’t it.

Good theory, but over that period energy use per household barely changed:

Probably fair to say that the ‘dash for gas’ made a big difference, with the cost being lower than that of coal fired power stations, but again you’d have to tie this in with both privatisation and, ahem, certain Thatcherite policies of the mid 80’s…

Utility bills in our house consume 12% of our income– whatever any graph might say,bills are going up by ‘inflation’ busting amounts, sometimes twice yearly.

the fact prices are going up doesn’t necessarily mean the retail companies are gouging us – energy is traded internationally and the immediate consequence of q/easing is that the pound is worth less and hence it costs more to buy internationally traded products like oil and gas.

Good theory, but over that period energy use per household barely changed:

It was not a theory but a hypothesis.
You have still not proved your initial assertion that prices have dropped for example on that graph we can see the % of disposable income spent has decreased – this could be caused by either massive increases in earnings or by reduction of power prices. This is not even a debatable point you have not presented evidence to support your claim of a price drop yet so either do so or stop posting other stuff that also does not prove it

Any chance you could just cut to the chase. stop flirting and do something based on KwH adjusted for inflation – ie something that would accurately measure what we are discussing?

Again I suspect you are right but those tables dont prove it
So please show, in real terms that prices dropped per KwH.

You claim to be a scientist dont you? I thought at least some of what you said on here was not scribbling

this could be caused by either massive increases in earnings or by reduction of power prices

I think I conceded that when I commented that

if you’re telling me that the average household was significantly better off in real terms between 1980 and 1990, then I think we’d all have to agree on a rallying call of Huzzah for Thatcherism in delivering this!

So, either way, Thatcher wins 😀

I was just about to say this thread, whilst having some good tables, needed a graph.

and you have still not proved your point that prices went down

Probably fair to say that the ‘dash for gas’ made a big difference, with the cost being lower than that of coal fired power stations, but again you’d have to tie this in with both privatisation and, ahem, certain Thatcherite policies of the mid 80’s…

The dash for gas did make a difference, just as importing cheap coal from places like Russia and Columbia, all mined by workers on lower wages of course. I’m really happy that Zulu has pointed out the architect of energy privatisation. It’s amusing that you crow about something that happened over twenty years ago, while conveniently ignoring the consequences of those actions today.

The private power firms began a steep climb in their charges to UK households, and by 2008, gas and electricity prices for British consumers (after accounting for inflation) had risen by 60% and 40% respectively from their 2003 level, significantly exceeding pre-privatisation energy costs.

And since then, despite a dip following the financial crisis and then a partial recovery in global hydrocarbon prices to below their 2008 levels, the cost of gas and electricity to people in the UK has risen by a further 20%.

And there was me thinking that according to capitalist ideology, privatisation, competition and deregulation in the UK should lead to more efficiency and lower prices. Of course, I forgot. It was also supposed to release funding for investment for energy infrastructure. Ironic when the likes of Scottish power which is awash with cash can make loans to it’s parent company, while at the same time increasing energy prices under the pretence that it is needed to invest in infrastructure.

In reality it is the public who must always pay for investments by utilities, whatever the nature of ownership. But with privately owned utilities, the public must also pay for the costs of competition and fragmentation, as well, of course for the profits accrued by the firm’s shareholders, top executives, and creditors.

EDF is 87% owned by the French Government. It runs 22% of electricity generation in the EU. Via its subsidiary EDF Energy, the French state-owned firm has also purchased Britain’s nuclear energy company British Energy in 2008, and EDF is now the largest electricity producer in the UK.

One has to note that 80% of France’s power comes from Nuclear and so they are largely insulated from fluctuating fossil fuel prices like us in the UK. Some good foresight by the French there.

While EDF enjoys a virtual monopoly in France, it is publicly owned, and has its charges set by the state, and as a result EDF supplies electricity at the lowest production price in Western Europe.

The French got it right, and we, or should I say Thatcher got it badly wrong.

I suppose I could say something about railway privatisation and how it’s costing twice as much in terms of subsidy than it did when it was nationalised, but that would go from raining on your parade to you standing under a waterfall.

Just an added bit of info (I work in the energy market). Mrs T, even though I can’t abide her, did one thing right in the privatisation: she split the market into multiple units based on the PES (public electricity supplier) to give competition. 12 suppliers in all. Most of the new companies, after 1998 deregulation to sub 150kWhr customers, divested themselves of their metering divisions, focussing on retail, distribution, generation and wholesale markets as the metering operation was seen as a cost and not a revenue-generator. Hence the formation of Accuread/Siemens metering as they consolidated.

Retail tends not to bring in much money per customer. Wholesale does, and distribution brings in a nice steady flow for their companies on the sub-30KV lines (above that is national grid). Wholesale is seen (in my co) as an offshoot of generation.

Whats a bit more interesting is how our European colleagues privatised. Germany, for example, split its electricity market into two companies. For a big country. As a result one company we know of: E.On, has loadsa dosh to go out and buy other countrys’ suppliers France hasn’t privatised yet owns a big chunk of our market. (This was also a complaint about BT & British Gas – moving from state monopoly to private one).

I wonder how the pro-free-market-at-any-costs Conservatives think about our free market energy market subsidising the French left-wing government?

The only positive out of this is that the UK customer is more savvy. There’s about a 25% churn in the UK market, but very little churn outside of the UK.

Sorry if this info is a biti disjointed, I’m just brain-dumping to add info to the discussion.

… So taking on the vested interests in the city in the interests of us… The consumer

What???
Noooooooooooooooo…..

All hope is lost, Thatcher has won.
People used to think of themselves as citizens. Now it’s consumers.
It’s over.

ElBent– i totally concur with your analysis.

AdamW- how can 25% churn be a positive- these are billing companies, parasitic organisations that have been ‘created’ to filch money off ‘consumers’– and yes the trick has been repeated on the railways, and the NHS is next in line– these are all essential parts of a modern society, capitalists will always seek ways to exploit this.

No, but I dealt with plenty in this country before the tory fiends privatised the utilities, and it was much better. Less fractured, more local knowledge and less deceipt.

you do know that they had no choice if they were going to invest in the infrastructure without loading the national debt

Where is TJ when we need him? He was always good at these arguments, I mean, discussions!

He was banned.

Hi Rudebwoy

The only positive I see is that people are more willing to ditch one and go to another, as a market should work, as compared to our European cousins who stick with who they have regardless of cost.

I have modified my personal position over the years. In a properly-regulated market vendors should be able to pump power into the grid, but since the grid is singular that should stay nationalised. Same for the wires for telephony, the pipes for gas and the entire water industry: if I think my water company is too expensive how do I change companies to one cheaper? They are local monopolies so should not exist in a so-called free-market economy.

Unfortunately the regulators are toothless puppets of the industries they “regulate”, and all politicians are the same. So we’re all doomed! 🙂